We’re Going Broke Chasing the American Dream

The parlous financial state of many Americans is well-known: My MarketWatch colleagues Quentin Fottrell and Catey Hill had good pieces about it recently.

I’ve written that many Americans take Social Security early or don’t invest in stocks because they just don’t have the money.

But it often takes a personal story to bring it all home, and that’s what writer and critic Neal Gabler did in the May issue of the Atlantic, where he revealed that he’s one of the 47% of Americans who couldn’t come up with $400 in an emergency.

With honesty and courage, Gabler describes how he — who according to Wikipedia turns 66 this year — got into such desperate straits after a writing career he modestly calls “passably good,” but is surely far better.

Gabler has written acclaimed biographies of Walt Disney and Walter Winchell (the model for the smarmy gossip columnist played by Burt Lancaster in the classic movie, “Sweet Smell of Success”). “An Empire of Their Own,” about the pioneering producers of Hollywood, is in my opinion one of the best books ever written about the American Jewish experience.

“I don’t ask for or expect any sympathy,” he writes. “I am responsible for my quagmire — no one else.”

His situation is the product of some bad luck and many poor choices. For the details, you should read the article yourself, or better yet buy the magazine on the newsstand (consider it a non-tax-deductible contribution to good journalism). But in brief, here they are:

1. He chose to be a writer, not the most stable profession.

2. He chose to write books, which don’t produce income for years.

3. He chose to live in high-cost New York City.

4. He chose to have two children, whom he sent to private school early on and then to Stanford and Emory for college.

5. His wife quit her job as a film executive to spend more time with the kids when they moved to eastern Long Island.

By making this public, Gabler opens himself up to scrutiny and criticism, and he didn’t respond to my request for an interview. But how many of us can say we haven’t, with the best of intentions, made big financial mistakes?

Gabler touches on what may be one of our biggest problems, yet one that’s almost taboo to mention: Too many of us are chasing the American Dream without having anywhere near the means to pay for it.

Convinced their lives would be better than their parents’ (who, in the case of early boomers like Gabler, lived through the Depression and World War II) and that their children’s lives would be better than their own, people did whatever it took to maintain at least the appearance of success, if not affluence.

It wasn’t only “keeping up with the Joneses,” as Gabler points out. “People want to feel, need to feel, that they are advancing in the world. It’s what sustains them,” he writes.

Ambition and aiming high are good things. But the American Dream is much more expensive than it used to be. In 2014, I estimated it costs a family of four$130,000 a year to live it, while incomes are stagnating because ofglobalization, technology, trade, immigration, what have you. That’s putting the Dream out of reach of more and more people.

Too many have filled that gap with easy credit card debt, cash-out refinancings and home equity lines of credit (which exceeded $1 trillion from 2002 to 2005 alone), or by emptying their 401(k) accounts. It may have felt good, but it bankrupted their future. What an apt metaphor for a country that’s living way beyond its means!

It’s really, really hard to tell your daughter you can’t afford to send her to Stanford and instead she’ll have to go to Stony Brook (an excellent state university in eastern Long Island, where Gabler now teaches). It’s hard to say “no” to so many things and still think you’re living the Dream.

So maybe we need to redefine the American Dream beyond the purely material goals of the postwar years, when our growth seemed unstoppable. Maybe it should be more about the freedom to succeed or fail on our own terms. It could also encompass pride in achievement, family and friends, community service and leaving a legacy of which we can be proud.

Because we’re chasing a dream that’s becoming more and more unattainable for more and more people, and too many of us, like Neal Gabler, wind up with nothing to show for it.

One thought on “We’re Going Broke Chasing the American Dream”

It is time to redefine the ‘American Dream’ along with what constitutes your ‘Dream Home’. Gabler made decisions for his life and family that felt like reasonable choices and worthy sacrifices (such as good colleges for the kids) which left him in a very difficult position in retirement. I suspect there are quite a few people in this position that are keeping their dire circumstances a secret.

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